The progressive easing of lockdown measures allowed coal miner MC Mining’s Uitkomst Colliery to return to steady-state production, while international coal prices trended positively during September and October, acting CEO Brenda Berlin said in a statement on the company’s results for the three months ended September 30.
Uitkomst generated 137 284 t of run-of-mine (RoM) coal, a 1% improvement on the comparative quarter to end September 2019.
The South African government declared a nationwide lockdown in March to prevent the spread of Covid-19, which resulted in the majority of Uitkomst’s customers suspending their operations, and this continues to affect the colliery’s sales order volumes.
Uitkomst produces high-grade metallurgical, thermal and high-ash middlings coal and the colliery’s largest customer experienced operational challenges at its Newcastle furnaces during September, which limited volumes bought from Uitkomst.
Coal sales were 25% lower year-on-year, with 20 667 t of saleable coal on hand at the end of the quarter.
Limited activities continued at the company’s Makhado hard coking coal project, Vele semi-soft coking and thermal coal colliery and Greater Soutpansberg projects (GSP) following the Covid-19 lockdown.
The pandemic resulted in a significant decline in API4 export thermal coal prices but these did start to recover at the end of the quarter although remaining 10% below the comparative quarter of 2019.
Restructuring of the March 2017 Industrial Development Corporation of South Africa (IDC) facility allowed for the drawdown of R40-million to advance the Makhado project, delaying the repayment of funds utilised under this facility until November 30.
The issue of new equity to existing and new shareholders raised R15-million and satisfied the condition for the restructuring of the initial IDC facility.
MC signed a share subscription agreement with Columbia Skies Holdings (CSH) for R9.93-million. Subsequent to the end of the quarter, CSH failed to provide funding in accordance with the terms of the agreement and the company reserves its rights in this regard.
Composite debt/equity funding initiatives for the Makhado project continued during the quarter under review and are expected to be concluded in the fourth quarter or the first quarter of 2021.
Available cash at quarter-end was $1.6-million and restricted cash was $30 000.